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While scammers are out there marking up hand sanitizer and surgical masks, there is a much larger risk of fraud looming in the future.

Congress is contemplating a $2 trillion economy saving, stimulus package and nobody outside of congress knows exactly where the money will go. That amount of money is more than the annual budgets for both the Department of Defense and Medicare/Medicaid combined. While most every American is expecting a check in the mail at some point in the near future, many hundreds of billions will be distributed to corporations, large and small, across the country. One can be sure that fraudulent claims will abound.

Secretary of Treasury Steven Mnuchin in the middle of negotiations of largest stimulus in US history

Barcroft Media via Getty Images

Where there are large budgets, there are larger frauds. Enforcement actions in healthcare range from a woman falsely billing medicaid for a few thousand dollars, to multi-million dollar kickback schemes for medical devices. According to a Department of Defense Report, during the five year period from 2013-2017, there were 1,059 criminal cases of defense contracting fraud resulting in the conviction of 1,087 defendants, including 409 businesses. Fraud is big business.

I spoke with Joel Androphy, Berg & Androphy, who represents whistleblowers who have reported fraud. Androphy thinks that this new stimulus program represents a huge opportunity for fraud to occur. The stimulus is being negotiated behind closed doors and the public is only briefed after senior congressional members emerge to tell us of their decision. It’s not very transparent and we will all have to live with the outcome. It is like waiting to see the color of smoke coming out of a Sistine Chapel chimney to see if the College of Cardinals made their decision on a pope.

Law firms that represent whistleblowers who report fraud to the government involving health care providers, defense contractors and others in industries dependent on government funds, should know the plan for how the money will be allocated. “There is an opportunity now to put protections in place,” Androphy said.

One concern Androphy has is whether or not corporations and some of individuals that previously were involved in fraud and corruption will also be beneficiaries of any stimulus program. “I want the money to go to the American worker, not the American fraudster,” Androphy said.

No one wants billions disappearing in fraud schemes that will take years of investigations and task force operations to gather information for litigation and settlements, which usually represent only a fraction of the stolen money.

Androphy believes that part of the oversight of the distribution of these funds should be part of a task force. Androphy said, “I think we need a select group of retired government prosecutors, whistleblowers, and trusted politicians like by Sen. Charles Grassley, master craftsman of the False Claims Act and champion of efforts to hold the wrongdoers responsible, appointed to lead the effort.” The legislation should have special provisions for whistleblowers to report their claims, a designated prosecutors office to investigate, and specialized courts to expedite any litigation. Penalties should be most severe.

Before we distribute needed funds it would be good to have a plan in place about who gets those funds. Even when there is a big stimulus, there doesn’t need to be a big fraud. A little planning and oversight will help.

I established 500 Pearl Street as a strategic consulting firm for attorneys and their clients as an advisor on federal criminal cases. I write here on criminal justice

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I established 500 Pearl Street as a strategic consulting firm for attorneys and their clients as an advisor on federal criminal cases. I write here on criminal justice matters, particularly related to white collar crime, and speak nationally on the topic. In 2007, I co-authored a book with journalist Neil Weinberg called "Stolen Without A Gun" after serving more than 18 months in prison for wire fraud and money laundering.